The July to September quarter of tax year 2026-27 closed on 30 September, and banks now have until 31 October to file their quarterly TCS statements. For many families, the certificates that follow will be the first time they see in one place how much tax was collected on money sent abroad since April. Advisors explaining those numbers will be working from a TCS rate chart that is shorter than last year's, because the Budget cut several rates to 2 per cent. The one rate that matters most for clients who invest overseas did not move.
The 2026-27 TCS rate chart is easier to read, but its costliest row, 20 per cent on investment remittances above ₹10 lakh, is unchanged, and the ₹10 lakh threshold is shared across every purpose a client remits for. Reading the chart by purpose, and by the order in which a family sends money through the year, is what turns it into useful advice. Raveum's guide to TCS on foreign remittance covers the wider rules, and this article stays with the chart.
What changed in the Budget for tax year 2026-27
In her Budget speech on 1 February 2026, the Finance Minister proposed two cuts. TCS on overseas tour programme packages fell from 5 per cent and 20 per cent to 2 per cent, "without any stipulation of amount". TCS on remittances for education and medical treatment under the Liberalised Remittance Scheme fell from 5 per cent to 2 per cent. Both changes took effect from 1 April 2026, the same day the Income-tax Act, 2025 replaced the 1961 Act, so TCS on these remittances is now collected under Section 394 rather than Section 206C(1G).
The rest of the chart stayed where it was. Remittances for investment, including money sent abroad for property, shares or funds, still attract TCS of 20 per cent on the amount above ₹10 lakh in a tax year. Gifts to relatives abroad and money for their maintenance fall in the same row for other purposes. Education paid for with a loan from a specified financial institution remains free of TCS, as it was last year.
The TCS rate chart for 2026-27 in plain words
For a resident individual remitting through an authorised dealer bank, the chart for tax year 2026-27 now has five rows that advisors will meet in practice. Each rate applies only to the part of a remittance above the threshold, where one exists.
- Education financed by a loan from a specified financial institution attracts no TCS at any amount.
- Education paid for by the family attracts no TCS up to ₹10 lakh and 2 per cent above it.
- Medical treatment abroad attracts no TCS up to ₹10 lakh and 2 per cent above it.
- Overseas tour packages attract 2 per cent from the first rupee, collected by the tour operator rather than the bank.
- Investment, gifts and every other purpose attract no TCS up to ₹10 lakh and 20 per cent above it.
Two details sit outside the chart but change its result. A client without a valid PAN, or with a PAN that has become inoperative, faces a higher collection rate than the chart shows. The ₹10 lakh threshold also covers all purposes together for the tax year, per person and across all banks, rather than applying separately to each purpose. The LRS limit itself is separate and remains USD 250,000 per person per financial year.
Why a shared threshold changes the arithmetic
The shared threshold is where most of this year's client questions will come from. Families often send money abroad for more than one reason in the same year, and the ₹10 lakh allowance is used up by whichever remittance goes out first. A tuition payment in June can therefore reduce the room left for an investment remittance in October, even though the tuition itself attracted no TCS.
For example, a client who remits ₹6 lakh for a daughter's tuition in June and then ₹30 lakh for an overseas investment in October has remitted ₹36 lakh in the tax year. Only ₹4 lakh of the threshold is left when the investment goes out, so ₹26 lakh of the investment remittance sits above it. At 20 per cent, the bank collects ₹5.2 lakh. Had the same client made only the investment remittance, the collection would have been 20 per cent on ₹20 lakh, or ₹4 lakh.
Neither figure is a final tax. TCS is credited against the client's income tax for the year, and any excess comes back as a refund once the return is processed. The real cost is cash flow, because the ₹5.2 lakh in the example is out of the family's hands from October until the return for tax year 2026-27 is filed and processed, which cannot happen before the tax year ends on 31 March 2027.
Where the collected tax shows up
Each quarter, the bank reports the TCS it collected in Form 143, the quarterly statement that replaced Form 27EQ, and issues the client a certificate in Form 133, which replaced Form 27D. For the July to September quarter, the statement is due on 31 October 2026 and the certificate follows by 15 November. Raveum's note on Form 133 and TCS certificates in 2026-27 explains what to check on that certificate when it arrives.
The same amounts then appear in the client's annual information statement. Under the Income-tax Rules, 2026, that statement is Form 168, which the Income Tax Department describes as the replacement for Form 26AS, with TCS shown in its own part. Matching the certificate, the Form 168 entry and the client's own record of remittances is the simplest way to catch a wrong PAN or a missing entry before the return is filed.
What the lower rates do not change for investment clients
A lower rate on education and travel says nothing about whether an overseas investment suits a client. Money sent abroad for investment still falls in the highest row of the chart, and the investment itself carries its own risks. Private real estate can lose value, tenants can leave, distributions may not be paid, and the money is usually locked in until the property is sold. Leverage, movements between the rupee and the dollar, and concentration in one property or one market add further risk, as the US commercial real estate guide for advisors sets out in more detail.
What advisors should do before the next remittance
The practical work is to plan each client's remittances across the whole tax year rather than one transfer at a time, starting before the October statements are filed.
- Before 31 October, list every LRS remittance each client made from April to September, by purpose and by bank, so the Form 133 certificates can be checked when they arrive.
- Work out how much of the ₹10 lakh threshold each client has already used, counting education, medical and gift remittances as well as investments.
- Check whether any education remittance was funded by a loan from a specified financial institution, and confirm the bank recorded it that way.
- Confirm that each client's PAN is valid and operative before any further remittance, since a missing or inoperative PAN raises the rate.
- For clients planning an investment remittance later in the year, estimate the TCS in rupees and how long it will stay out of the family's hands, and agree with the client's CA how it will be claimed.
Family plans need one more check. When one family member funds another's remittance, the clubbing of income and gift tax questions should be settled with the client's CA before the money moves. Advisors who introduce eligible clients through Raveum's partner page will recognise the pattern, because each investment remittance above the threshold produces a certificate that has to be tracked through to the return.
The Budget made the TCS rate chart shorter, and for families paying tuition or hospital bills abroad the relief is real. For clients who invest overseas, the chart reads much as it did a year ago, and the shared threshold means the order of a family's remittances matters as much as their size. Advisors who read the chart purpose by purpose and month by month will give clients a clearer picture of the cash they will need and when it will come back. The guide to TCS on foreign remittance carries the full rules for advisors who want to go further.
Frequently asked questions
What is the TCS rate on foreign remittance for 2026-27?
For tax year 2026-27, TCS on LRS remittances for investment, gifts and other purposes is 20 per cent on the amount above ₹10 lakh. Education and medical remittances attract 2 per cent above ₹10 lakh, education funded by an approved loan attracts none, and overseas tour packages attract 2 per cent from the first rupee.
Is the ₹10 lakh TCS limit per purpose or for all remittances?
The ₹10 lakh threshold is a single allowance per person for the tax year, shared across all LRS purposes and all banks. Education, medical, gift and investment remittances all count towards it, so an early tuition payment reduces the room left before TCS applies to a later investment remittance.
Is TCS charged on education remittances paid through an education loan?
No. Money remitted for education and financed by a loan from a specified financial institution attracts no TCS in tax year 2026-27, whatever the amount. The client should make sure the bank records the remittance as loan-funded, because a self-funded education remittance attracts 2 per cent above ₹10 lakh.
Why is TCS charged on a tour package below ₹10 lakh?
Overseas tour packages sit in a separate row of the chart with no threshold. From 1 April 2026, the tour operator collects 2 per cent on the full package price, after the Budget replaced the earlier 5 per cent and 20 per cent rates. The amount is credited against the client's income tax like any other TCS.
How does a client get TCS on an LRS remittance back?
TCS is a credit, not a final tax. The collected amount appears in the client's Form 133 certificate and annual information statement, and the client claims it in the income tax return for the year. If total credits exceed the tax due, the excess is refunded after the return is processed.
Does a lower TCS rate make an overseas investment right for a client?
No. TCS affects cash flow, not the merits of an investment, and investment remittances still attract 20 per cent above ₹10 lakh. Overseas private real estate carries risks such as loss of capital, illiquidity, falling property values, unpaid distributions, leverage and currency movements, which the client should weigh with their advisor and CA first.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
